Afreximbank Is A Shady Bank: Prof Steve Hanke Questions Govt Deals

Renowned economist and currency expert, Professor Steve Hanke of Johns Hopkins University in Baltimore in the United States has said that the government has blundered into a credibility deficit by making inconsistent policies. Hanke also questioned the credibility of the deals which the government had made with the African Export-Import Bank (Afreximbank) describing the bank as being shady. In an interview with the BBC, Hanke said

The government has had a lot of inconsistent statements and policies. They are issuing a couple of quasi-currencies or not real money. Bond notes, they call them, and real-time gross settlement, they are two forms of quasi-money… The problem is that they trade at massive discounts to the United States dollar, a 56% discount and they are supposed to be trading at par, so no one trusts the government or anything the government is doing.

There has been a bit of positive rhetoric, but when you lift the hood and really look under the thing, nothing has changed very much. For example, they just indicated that the new minister of Finance (said) that the African Export (and) Import Bank was going to be covering or guaranteeing not only these bond notes but these real-time gross settlements issues by the government and the problem is that it is a fairly shady bank. No one knows what is going (on) and no one trusts the bank so it is a credibility problem.